Headlines

Beijing is diversifying its overseas investments and pressing U.S. officials for an "exit strategy" from the ultra-loose fiscal and monetary policies that China fears will eventually inflate away the value of its U.S. bond holdings and fell the dollar. But China's pragmatic policymakers also know there is no practical alternative to the dollar as the world's main reserve currency.

Differences about bank stress tests and the timing of exit strategies from government measures to deal with the recession overshadowed the start of a G8 finance ministers meeting in southern Italy on Friday night, the Financial Times reported. Germany’s Peer Steinbrück said it would be difficult to find support for a discussion on exit strategies, although Jim Flaherty, Canada’s finance minister, had said the time had come to begin to talk about how to wind down economic stimulus measures. Fragility of the eurozone’s recovery was underlined on Friday.

The head of the IMF questioned on Monday any debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs. The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. Employment during the first quarter fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995. Even if some form of economic recovery is not far off, analysts say unemployment will climb for many months to come.

Arcandor AG's filing for insolvency presents an opportunity to implement restructuring moves for a better future, German Chancellor Angela Merkel said Monday, Dow Jones Newswires reported. The filing for insolvency doesn't mean the end of the troubled retail and tourism company, "but offers the chance for a reasonable restructuring," Merkel said at the Day of Germany's Industry, organized by the BDI Federation of German industries.

The problems of Greece's homes market pale in comparison with those of Spain and Ireland, but the pain is seeping through the economy. About 135,000 properties, mostly residential, remain unsold in Greece, compared with well over one million in Spain and about 70,000 in Ireland. Construction accounts for 11 percent of Greece's GDP -- a significant factor taking the economy into recession after years when Greece grew by about 4 percent annually, well above its euro-zone peers. This recession will be its first since 1993.

Latvia's prime minister on Monday expressed confidence that the government will receive desperately needed funds from international lenders as the recession-hit country braces itself for fresh protests, Forbes reported on an Associated Press story. Latvia, whose economy is contracting by about one-fifth this year, is counting on a €1.2 billion ($1.7 billion) payment from lenders such at the International Monetary Fund and the European Union to ward off bankruptcy. "I am sure we will get the loan," Prime Minister Valdis Dombrovskis told the LTV television station.

PT Bakrie & Brothers, one of Indonesia's largest conglomerates with interests in mining, energy and telecoms, is emerging from a $1.3 billion debt restructuring in control of its major companies. Last year, Bakrie & Brothers' financial position looked untenable. It racked up huge debts, in return pledging to lenders its shares in related companies as collateral. When share prices in its companies unexpectedly collapsed during the global subprime crisis, Bakrie & Brothers was unable to top up its collateral and was forced into debt talks.

German lawmakers are preparing a bill to provide tax relief for investors in troubled companies, a plan that may benefit Magna International Inc., the auto-parts maker in talks to take over General Motors Corp.’s Opel unit. Magna, based in Aurora, Ontario, is working out the details of a deal over the costs of investing in the carmaker. Magna, along with Russian lender OAO Sberbank, may invest at least €500 million ($702 million) in Opel.

French multimedia group Thomson SA holds a crucial annual shareholders meeting on Tuesday, where the survival of the debt-laden technology group is at stake, Reuters reported. Shareholders, meeting on June 16, will be asked to approve 2008 accounts that show a net loss of 1.9 billion euros and will be presented, if all goes well, with a balance-sheet restructuring deal. "I see three scenarios: either they reach a deal, or they get a new delay to complete the talks, or there is no agreement and they file for bankruptcy protection," one analyst said.

The liquidator of failed whitegoods company Kleenmaid may take legal action against one of the former directors, ABC News reported. The matter involves six Kleenmaid franchises in Queensland, New South Wales, Victoria and South Australia. Kleenmaid, based on Queensland's Sunshine Coast, went into voluntary administration in April owing about $80 million to creditors. Bradley Young owns Kleenmaid franchises in Jindalee, Toowoomba and the Gold Coast in Queensland, in Warner's Bay in NSW, Mitcham in Victoria, and in Marion in SA.